Frequently Asked Questions about the “Families First Coronavirus Response Act”

First, the Expansion of FMLA under the “EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT”

What does it do?  Broadly, the Act requires that certain employers provide employees with extended Family Medical Leave Act coverage related to the need to care for their children because of childcare closing due to the Coronavirus outbreak. 

When does it take effect?  The Act was signed by President Trump on March 18, 2020, but is not effective until “not later than” April 2, 2020.  The Act expires after December 31, 2020.  29 USC 2612(a)(1)(F).

Which employers are covered by the Act?  The law covers private employers with fewer than 500 employees (Sec. 110(a)(1)(B)) and all government employers.

• But, businesses with fewer than 50 employees may be excluded if providing expanded benefits would jeopardize the viability of the business as a going concern.  (Sec. 110(a)(3)(B))
• In addition, certain health care providers and emergency responders are excluded from coverage. (Sec. 110(a)(3)(A))

How does an employee qualify for benefits?

A ‘qualifying need related to a public health emergency’, with respect to leave, means the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or child care provider is closed because of an emergency with respect to COVID–19 declared by a Federal, State, or local authority.

How much leave may employees receive? The first 10 days of leave may be unpaid, but the employee can convert unpaid leave to paid leave by electing to use their accrued vacation leave, personal leave or medical/sick leave.  (Sec. 110(b)(1)(A)).

An employer “shall provide paid leave” if the qualified leave continues beyond 10 days, up to the statutory maximum 12 weeks (i.e., 10 additional weeks).  The amount to be paid is at least two thirds of the employee's regular rate of pay, based on the number of hours the employee normally would have been scheduled to work (for employees with varying schedule hours, a formula is provided). The amount an employer must pay under this section is capped at $200 per day, and $10,000 in the aggregate.  (Sec. 110(b)(1)(A)).

How long must an employee be employed to qualify for coverage?  ‘Eligible employee’ means an employee who has been employed for at least 30 calendar days by the employer.  Sec. 110(a)(1)(A).

Tax Credit

Private employers can claim a tax credit against the employer's portion of Social Security taxes for 100% of the emergency paid sick leave wages paid to employees, subject to caps.

In addition, the amount of the credit shall be increased by so much of the employer’s qualified health plan expenses as are properly allocable to the qualified sick leave wages (subject to allocation rules).

---------------------------------------------------

Second is the Emergency Paid Sick Leave Act, which is a new Act, separate from FMLA.

What does it do?  The Act requires that certain employers provide their employees paid sick time to the extent that the employee is unable to work (or telework) due to a need for leave because certain circumstances related to the Coronavirus outbreak. 

When does it take effect?  The Act was signed by President Trump on March 18, 2020, but is not effective until “not later than” April 2, 2020.  The Act expires after December 31, 2020.

Which employers are covered by the Act?  The law covers private employers with fewer than 500 employees and all government employers.

How does an employee qualify for benefits?

Covered employees are entitled to paid leave for specified purposes related to coronavirus. Employers must provide paid sick leave if the employee is unable to work or telework because the employee:

• Is under a federal, state, or local quarantine or isolation order related to COVID-19.
• Has been advised by a health care provider to self-quarantine because of COVID-19 concerns.
• Is experiencing COVID-19 symptoms and seeking a medical diagnosis.
• Is caring for an individual subject to a quarantine or isolation order or advised to self-quarantine because of COVID-19 concerns.
• Is caring for a son or daughter where, due to COVID-19 precautions, the child's:
  • school or place of care has been closed; or
  • child care provider is unavailable.
• The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
• Note:  certain health care providers and emergency responders may be excluded from coverage.

How much leave may employees receive?

Covered full-time employees are entitled to 80 hours of paid leave.

Part-time employees are entitled to the average number of hours the employee works during a two-week period.

How much must an employer pay to an employee on paid leave?  Leave is paid at the employee's regular rate of pay, except that leave used to care for another is paid at two-thirds the employee's regular rate of pay. Paid leave is capped at:

• $511 per day and $5,110 in total for the employee's own health condition or quarantine.
• $200 per day and $2,000 in total for leave necessitated to care for another individual.

How long must an employee be employed to qualify for coverage?  The paid sick time shall be available for immediate use by the employee, regardless of how long the employee has been employed by an employer.

Can employers require that employees use up their accrued sick or vacation time, or find someone to cover their shift?  Employers cannot require that employees:

• Use other available paid or unpaid leave before allowing paid leave available under this emergency provision (but they can).
• Find a replacement to cover the employee’s hours or shift before allowing paid leave.

After the first use of leave, employers may require the employee to follow reasonable notice procedures in order to continue receiving paid sick time. Unused leave cannot be carried over to the following year.

The law expressly states that it does not diminish any employee rights under an existing law, employer policy, or CBA. While this suggests that employers with existing paid leave policies must provide leave under the emergency act in addition to leave already provided, explicit language to this effect was deleted from prior version of the bill. Regulations issued before any effective date may help clarify this point.

Tax Credit

Private employers can claim a tax credit against the employer's portion of Social Security taxes for 100% of the emergency paid sick leave wages paid to employees, with per employee caps of:

• $511 per day when leave is taken for their own self-isolation, diagnosis, or care.
• $200 per day when leave is taken to care for a family member or because of a school closure or unavailability of child care provider.

Employers must post a notice regarding employees' rights under the emergency law (to be made available by the Secretary of Labor). The law prohibits retaliation against employees who use leave under the law or complain about violations of the law.

Failure to comply with the emergency law constitutes a failure to pay minimum wages in violation of the FLSA (see Practice Note, Wage and Hour Law: Overview: Remedies).

For more information on the new law, see US House of Representatives: H.R. 6201, Families First Coronavirus Response Act: Emergency Paid Sick Leave.

For more info, contact:

Laura Salerno Owens, President and Shareholder

LauraSalerno@MarkowitzHerbold.com

503-295-3085

Kyle Busse, Of Counsel

KyleBusse@MarkowitzHerbold.com

503-295-3085